National Housing Federation chief executive David Orr is simply wrong to suggest that there is ‘no evidence whatsoever’ to suggest that social housing damages the life-chances of many of those it accommodates.
The Department for Communities and Local Government’s own research shows that this is just the case. Its comprehensive 2007 study – the Hills Report into Social Housing – carried out with the Centre for the Analysis of Social Exclusion show that groups of social tenants have employment rates much worse than similar groups outside of social housing. For example the rate of employment for lone parents is 64%, but for lone parents that are social tenants it is 34%. For unqualified individuals it is 70%, but for unqualified social tenants it is 43%.
Social tenants with two labour market disadvantages (e.g. they are both unqualified and a single parent) have an employment rate of 30%, whilst across all tenures individuals with two market disadvantages have an employment rate of around 50%.
The gap between private and social tenants will be closer to 25%, as the 20% of households in social housing drags down the ‘average’ employment rate for ‘all’ tenants.
The Hills report also revealed that between 1994-2004 the proportion of social tenants in work who lost their job and remained unemployed was almost two and a half times more than the average. This was despite a booming labour market in this period.
Follow-up government work found it could not account for this gap and so said it was likely to be simply down to hidden problems among social tenants – but we believe the follow up work ignored the clear issue of incentives for social tenants.
Other recent DCLG figures – General needs social lettings 2007/8 – reveal that among those entering social housing less than 45% were working or retired. Of the remaining 55%, almost all were of working age but not working, (e.g. relying on incapacity benefit). So how social housing is allocated clearly penalises those who are on low incomes and in work.
As for Orr’s claim that the Treasury savings in Policy Exchange’s report are “pure fantasy”, just £7bn from the annual savings we identify of up to £20 billion come from reducing welfare dependency among tenants. The rest comes from lower housing costs cutting housing benefits, helping tenants who want to buy to do so, a new and less expensive way of funding new social homes and other reforms.
But the biggest disappointment in Orr’s comments is actually what he didn’t say. It’s disappointing that as the spokesman for the NHF he ignored Policy Exchange’s call for the government to build 100,000 new social homes every year. This report is hardly a simplistic drive for home ownership as he claims. But for existing social tenants who work hard, pay their rent and want to own, government should support that aspiration, and we would hope that the NHF would support their tenants’ aspirations as well.
The facts Alex Morton quotes are correct. His analysis is completely inverted. I simply cannot believe that Alex Morton can misunderstand cause and effect. 2,538 people were killed on the roads in 2008. Does that make cars bad?
His argument is arrant nonsense driven by political dogma that blinds him to the need to create a balanced society with a range of different tenures. If it wants to be taken seriously, Policy Exchange needs to make sure its arguments are more robust.
‘So how social housing is allocated clearly penalises those who are on low incomes and in work.’
Yes it does because under the present allocation scheme you are more ‘needy’ if you are unemployed and on a low income and therefore closer to homelessness than somebody working, and because there is such a dearth of council houses and flats owing to right to buy and the lack of replacements, then the result is the data that prompted the above report. It can hardly be a surprise that if a needs-based allocation system fills estates with unemployed people on benefits, that a subsequent survey by an external group will find that social tenants not in work are disproportionately represented.
There is a simple answer to the above. It is to build more council houses and flats in large numbers and soon. Then the needs-based allocation rules can be relaxed sufficiently to allow those on low incomes but in work to be granted a council house or flat, as used to be the case, and hey presto the figures will magically improve.
Policy Exchange don’t have a case, they’re just reflecting the appalling situation left after 30 years of right to buy.